The Local Effect of Oil on Women's Employment and Empowerment - Evidence from Africa

Sammanfattning: Does oil extraction impact local communities in developing countries? The socio-economic ramifications of oil extraction on the local population are not clear a priori. Recent evidence pointing towards a gender-differential impact of natural resources motivates an analysis focused on women. This paper examines the local effect of oil extraction on women's employment and empowerment in Africa. Using a novel data set, we exploit spatial and temporal variation in oilfield opening to estimate the local effect of oil extraction. We match precise oilfield data from Rystad Energy with geo-coded DHS survey data for six African oil-producing countries. Employing difference-in-difference estimation, we compare women close to and far from oilfields, before and after extraction starts. Our main results are three-fold: First, we find that the local industrial development stemming from oil extraction increases women's probability of service sector employment by 18%. This effect is robust to excluding migrants. We hypothesise that the economic benefits of oil extraction proliferate through local multiplier effects (spillovers). Second, there is no change in women's empowerment, as measured in terms of decision-making power and self-stated barriers to healthcare. Third, our results indeed capture a highly localised effect, as the positive impact on service sector employment vanishes with distance.